THE CONTEXT: The European Commission President Ursula von der Leyen, along with 22 out of 27 Commissioners, is visiting India on February 27-28, 2025, marking the first-ever visit by the EU College of Commissioners to the country. This landmark visit aims to strengthen EU-India relations across various sectors, including trade, technology, and security, amid growing global challenges and changing geopolitical dynamics.
THE KEY MILESTONES:
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- 1962: Establishment of diplomatic relations with the European Economic Community.
- 1994: Signing of the Cooperation Agreement, laying the foundation for broader political interactions.
- 2004: Elevation to Strategic Partnership status at the 5th India-EU Summit in The Hague.
- 2020: Adoption of the “India-EU Strategic Partnership: A Roadmap to 2025” at the 15th Summit.
STRATEGIC DIMENSIONS:
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- Geopolitical Alignment: The partnership has gained renewed significance amidst global power shifts, particularly in the Indo-Pacific region. Both entities share concerns about China’s assertiveness and seek to promote a rules-based international order.
- Economic Cooperation: The EU is India’s third-largest trading partner, with bilateral trade in goods and services reaching €95.5 billion in 20203. Ongoing negotiations for a Broad-based Trade and Investment Agreement (BTIA) aim to further boost economic ties.
- Technological Collaboration: The establishment of the India-EU Trade and Technology Council (TTC) in 2022 marks a significant step towards addressing key challenges in trade, trusted technology, and security.
- Climate Change and Sustainable Development: Joint initiatives like the India-EU Water Partnership and solar park programmes demonstrate a shared commitment to environmental sustainability.
- Maritime Security: Cooperation in the Indo-Pacific, counter-piracy efforts, and adherence to UNCLOS highlight the growing maritime dimension of the partnership.
KEY AREAS OF COOPERATION: INDIA-EU RELATIONS
1. Trade and Investment
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- Economic Significance: The EU is India’s largest trading partner in goods, accounting for 13.5% of India’s total trade in FY 2023-24. Bilateral trade in goods reached $137.41 billion in FY 2023-24, with exports at $75.9 billion and imports at $61.4 billion.
- Foreign Direct Investment (FDI): Cumulative FDI inflows from the EU to India stood at $117.4 billion from April 2000 to September 2024, representing 16.6% of India’s total FDI inflow. Indian FDI outflows to the EU were valued at approximately $40 billion during the same period.
- Free Trade Agreement (FTA): Negotiations for an India-EU FTA resumed in 2022 after a hiatus since 2017. The agreement aims to address issues like market access, investment protection, and geographical indications (GI). It is expected to be concluded by the end of 2025.
- Strategic Argument: Experts argue that the FTA will diversify India’s trade portfolio, reduce dependence on China, and strengthen economic resilience amidst global disruptions.
2. Technology and Innovation
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- High-Performance Computing (HPC) and Semiconductors: Joint research initiatives like the GANANA project (2025) focus on HPC solutions and semiconductor supply chain resilience. The EU-India Science and Technology Agreement has been instrumental in fostering innovation in fields like AI, quantum computing, and green technologies.
- Digital Public Infrastructure (DPI): Both sides are working towards interoperability of their DPIs while ensuring data privacy and intellectual property rights protection.
- Artificial Intelligence (AI): Collaboration between the European AI Office and India AI Mission includes projects on ethical AI frameworks and large language models (LLMs). This reflects a shared commitment to human-centric digital transformation.
- 6G Telecommunications: A Memorandum of Understanding between Bharat 6G Alliance and the EU’s Smart Networks Association has been signed to develop secure telecommunications systems.
3. Green Energy and Climate Action
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- Green Hydrogen Cooperation: The India-EU Green Hydrogen Forum focuses on infrastructure development, regulatory frameworks, and supply chain strengthening for green hydrogen. The European Investment Bank has committed €1 billion for Indian hydrogen projects.
- Clean Energy Partnership: The third phase of the India-EU Clean Energy and Climate Partnership (2025–28) emphasizes offshore wind energy, smart grids, energy efficiency, and climate diplomacy.
- Renewable Energy Achievements: India added 27 GW of renewable capacity in 2024 alone, reaching a total of 214 GW. This aligns with India’s target of achieving 500 GW of non-fossil energy capacity by 2030.
4. Defense and Space Cooperation
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- Maritime Security: Joint naval exercises were held in October 2023 in the Gulf of Guinea under the ESIWA+ security program. This cooperation addresses challenges like piracy, natural disasters, and counter-terrorism in the Indo-Pacific region.
- Space Collaboration: ISRO has partnered with the European Space Agency (ESA) on missions like Chandrayaan-3 and Aditya-L1. In December 2024, ISRO launched the EU’s PROBA-3 mission using its PSLV platform. An MoU has also been signed for cooperation on Gaganyaan, India’s human spaceflight mission.
5. Strategic Importance of Cooperation
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- Geopolitical Context: The partnership gains significance amidst rising global tensions due to China’s assertiveness in the Indo-Pacific and disruptions caused by the Russia-Ukraine conflict. Both sides aim to uphold a rules-based international order while diversifying defense supplies through initiatives like PESCO (Permanent Structured Cooperation).
- India-Middle East-Europe Economic Corridor (IMEC): Announced during the G20 Summit in New Delhi (2023), IMEC aims to counter China’s Belt and Road Initiative by establishing reliable connectivity between India, West Asia, and Europe through a sea-land transit network.
6. People-to-People Ties
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- Academic Exchanges: Over two decades, more than 6,000 Indian students have received Erasmus scholarships. Additionally, Indian researchers are among the top beneficiaries of Horizon Europe grants.
- Skilled Workforce Mobility: Indian professionals accounted for over 20% of EU Blue Cards issued in FY 2023-24, reflecting strong labor mobility ties between India and Europe.
THE WAY FORWARD:
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- Economic Integration & Trade Architecture: Finalize the India-EU FTA by 2025 to unlock $150+ billion bilateral trade potential (current: $137.4B in goods, $53B in services). Address legacy issues like EU’s non-tariff barriers (e.g., carbon tax under CBAM) and India’s tariff walls on automobiles (60%) and wines (150%). Create an India-EU Digital Single Market for seamless cross-border data flows, integrating India’s DPIs (Aadhaar, UPI) with EU’s Digital Identity Wallet.
- Strategic Tech & Defence Industrial Policy: Establish joint R&D hubs under the EU’s Horizon Europe and India’s National Quantum Mission. Mitigate China’s semiconductor monopoly (which controls 60% of global rare earths) through the India-EU Semiconductor MoU (2023). Co-develop 6G standards via the Bharat 6G Alliance-EU Smart Networks MoU, targeting a 20% global IPR share by 2030.
- Green Transition & Climate Justice: Operationalize the €1B EIB Green Hydrogen Fund to achieve India’s 5 MMT production target by 2030. Launch an India-EU Carbon Club for mutual recognition of carbon credits, modeled after Article 6.2 of the Paris Agreement.
- Multilateral Governance & Rulemaking: Jointly reform UNSC (India as permanent member) and WTO (e.g., fisheries subsidies). C. Raja Mohan advocates “coalition of democracies” to counter authoritarian capitalism.
- People-Centric Diplomacy: Scale Erasmus+ scholarships to 10,000 Indian students by 2030 (current: 6,000). Operationalize Phase II of ILO-EU Migration Project (2023-25) to formalize 500,000 blue-collar workers under EU’s Talent Pool Initiative. Create an India-EU Skill Parliament for mutual recognition of qualifications in nursing, AI, and shipbuilding (linked to IMEC labor needs).
THE CONCLUSION:
The India-EU partnership must evolve into a “Global Swing Alliance”—a flexible coalition that balances strategic autonomy with collective action. By 2030, this could position India-EU as the third pole in a multipolar world, countering US-China bipolarity while advancing SDGs, tech sovereignty, and democratic resilience.
UPSC PAST YEAR QUESTION:
“The expansion and strengthening of NATO and a stronger US-Europe strategic partnership works well for India.” What is your opinion about this statement? Give reasons and examples to support your answer. 2023
MAINS PRACTICE QUESTION:
The India-EU partnership has evolved into a multifaceted engagement encompassing trade, technology, and strategic cooperation. Critically examine the key areas of collaboration between India and the European Union.
SOURCE:
https://indianexpress.com/article/explained/why-india-europe-partnership-matter-9860292/
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